Answer :
Final answer:
The pro rata rule states that any increase in price paid for shares tendered must be offered to all shareholders, even those who have previously tendered their shares. It ensures fair treatment of shareholders and equal opportunity to benefit from price increases.
Explanation:
False. The pro rata rule states that any increase in price paid for shares tendered must be offered to all shareholders, even those who have previously tendered their shares.
Here is a step-by-step explanation of the pro rata rule:
The pro rata rule is a principle that ensures fair treatment of shareholders when there is an increase in the price paid for shares tendered.
According to this rule, any increase in price must be offered to all shareholders on a proportional basis, regardless of whether they have already tendered their shares or not.
This means that shareholders who have already tendered their shares will receive additional payment to compensate for the increased price, maintaining their proportional ownership in the company.
By applying the pro rata rule, all shareholders are given equal opportunity to benefit from any increase in share prices.
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